I haven’t been providing blow-by-blow coverage of the Sam Bankman-Fried trial and I don’t intend to. However, you might want to check out this article by Amy Castor and David Gerard on the latest developments, and for the daily updates I suggest following Molly White and CoinDesk’s Nikhilesh De.
Project Polaris: high-level design guide for offline payments
The Bank for International Settlements (BIS) Innovation Hub published a guide on the technology underpinning offline central bank digital currency (CBDC) payments. This follows up on an earlier overview report, by deep diving into the requirements and design choices, based on information gathered in a series of workshops conducted in collaboration with 12 solution vendors and 6 observing central banks. Currently, very few offline CBDC solutions are production-ready or working at scale in a live environment, but there are a number of mature pilots. The report discusses requirement trade-offs, for which the report suggests that central banks take an iterative approach to design, exploring alternative ways to achieve their objectives. [Read more at the BIS]
Deutsche Bank and Standard Chartered Ventures Test SWIFT Killer for Stablecoins and CBDCs
Deutsche Bank and Standard Chartered are testing a blockchain-based SWIFT-like messaging system that instructs and allows stablecoin and CBDC transactions to occur across a spectrum of networks. The banks are running a series of test cases, including transferring and swapping USDC stablecoins, on the Universal Digital Payments Network (UDPN), a permissioned blockchain system composed of validator nodes run by an alliance of banks, financial institutions and consultancies. The system was created by GFT Group and Red Date Technology, co-founder of the Chinese government-backed Blockchain-Based Service Network (BSN). [Read more at GFT] [Read some BSN history here]
Lloyds: Major cyber-attack on payments systems could cost $3.5 trillion
Lloyd’s, in partnership with the Cambridge Centre for Risk Studies published a systemic risk scenario that models the global economic impact of a hypothetical but plausible cyber attack on a significant financial services payments system, resulting in widespread disruption to worldwide business and potential global economic losses of $3.5 trillion or roughly 3.5% of global GDP. The figure represents the loss over five years and is weighted average of three scenarios – major, severe and extreme – generating losses ranging from $2.2 trillion in the less severe case to $16 trillion in the extreme scenario. [Read more at Lloyds]
*For those interested in intra-day updates, check out my searchable Diigo Fintech developments database, which is also a good place to go to query for past developments: https://www.diigo.com/user/kiffmeister/ART.
Kiffmeister’s central bank digital currency monthly monitor
Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com
The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).
Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]
WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]
